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The Real Living Wage – should employers commit to paying it?

Ikea, Chelsea Football Club and Aviva to name just a few have committed to paying their employees the real living wage which went up this week to £9.00 per hour and £10.55 per hour in London.

What is the Real Living Wage?

It’s a calculation based on the cost of a basket of household goods and services which are deemed to represent a decent standard of living.

The campaign for a real living wage started in 2001 by Citizens UK when the government’s minimum wage was just £3.70 per hour.

The UK real living wage was first set at a rate of £7.20 per hour in 2011 by the Resolution Foundation and it’s overseen by the Living Wage Commission.

It’s worth noting that in the last 7 years it has increased by 25%.

How is the Real Living Wage different from the Minimum Wage and the National Living Wage?

The minimum wage and the national minimum wage are set by government and are compulsory.   Employers therefore must pay at least the rates set by government otherwise they face significant fines.

Recently, 179 employers in the UK were collectively fined £1.3m for underpaying their staff.

Should you be paying the Real Living Wage?

There are huge benefits to paying the Real Minimum Living Wage, not least a more committed and engaged employee however for many small businesses, £9.00 per hour is a step too far.

We are advocates of paying employees a fair wage for a fair day’s work, but what we really advocate is providing a whole package for your employees which works for them and your business.

Could your business offer an additional day’s holiday for each year of service, a dedicated career plan and pathways including training or flexible working?

People often leave jobs, not because of their pay, but because the culture isn’t right for them or worse, because they just don’t feel appreciated.

Appreciation doesn’t have to cost; a simple thank you and recognition of hard work means the world.

The Simple Take is: It’s not all about the money; appreciating your staff and what they do for your business costs nothing but means everything. 

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